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There are plenty of options for investing in precious metals. While each strategy has its own benefits, there’s no doubt that silver is an investor favorite. When presented with the choice of buying modern or rare silver coins, though, you might have some difficulty deciding.
After all, you’re investing in silver regardless of whether you buy an American Silver Eagle or an 1893 Morgan Silver Dollar. There can be significant differences in value, though, and these differences can change over time. This simple fact can make your choice a difficult one.
At Silver Gold Bull, we strive to ensure our clients are among the most informed out there. Within this guide, we’ll discuss the differences, benefits and disadvantages of both modern and rare silver coins. In the end, you’ll have the knowledge to make a wiser investment decision.
The Value of Modern Versus Rare Silver Coins
When choosing between rare and modern coins, the big difference comes down to value. The amount of precious metal contained in these coins typically varies significantly, but its collectability and rarity that dictates the price of rarities.
With most modern silver coins, you typically pay only for its precious metal value. You will pay a slight premium over spot value to cover related costs, but this rarely adds much to the price. If you have a silver coin that’s rare, however, you must pay attention to numismatic value.
To better explain how modern and rare silver coins differ in worth, consider the following values of a 1797 Draped Bust Half-Dollar:
- Face value: $0.50
- Intrinsic value: $8.60 (i.e., 11.99 grams with silver at $22.84 an ounce in Sept. 2021)
- Numismatic value: $1.5 million
This half dollar is obviously an extreme example, but it shows how rare silver coins can have far more value than one might expect. It also shows that people who buy rare coins and those who buy modern pieces exist in two different worlds. One is a collector, and one is an investor.
Of course, rare coin collectors can also be investors. Any rare item can gain value over time, and it’s likely that the person who sold the aforementioned coin for $1.5 million at auction paid much less than that. If that’s the case, they made an incredible investment.
Now that you know the difference in these types of investments, you can begin weighing your options. This process should involve knowing which coins hold value and why. And if you’re leaning more towards modern coins, it’s important to recognize their many differences.
Types of Modern Silver Coins
Before delving into the benefits of modern and rare silver coins, it’s important to acknowledge that there are multiple types of the former. The specific coin you’re looking at will play a major role in its value. The simple fact is that not all modern silver coins are created equally.
By understanding each of your options, you’ll be able to make a better purchase decision. Each of these categories of coins has its own benefits, but it’s likely that one will offer you more based on your investment strategy.
Silver Bullion Coins
Some people don’t realize that “bullion” isn’t just a fancy way to describe a precious metal. Coins must typically meet a specific purity threshold to qualify. For silver, a purity of .999 must is typical.
Additionally, they’re released with no intent for the coins to gain additional numismatic value. This leads many people to think that buying silver bullion bars is the same as acquiring these coins. In reality, it costs more to produce a coin than a bar.
That means you’ll usually pay a higher premium. In every case, though, the bulk of the value comes from the silver itself.
Pre-1965 Silver Circulation Coinage
If you’ve done any research into rare silver coins, you’ve no doubt discovered America’s pre-1965 coinage. That’s because a variety of these coins — ranging from Mercury Dimes to Washington Quarters — contain 90% silver. This means they’re worth far more than face value.
There was a time when anyone walking around with change had silver in their pocket. This changed in 1965, though, when the government removed it from our coinage. Years of widespread coin searching and hoarding have significantly reduced the amount in circulation.
So while they don’t really qualify as rare silver coins, you’d have difficulty finding them in your change. They’re worth far less than other silver coinage options available, but their intrinsic value can still result in a nice profit.
Commemorative Silver Coins
The U.S. Commemorative Silver Dollar falls into a special category of rare silver coins. This is because they weren’t produced as bullion. That’s why their purity is only .900 — the same as pre-1965 circulation coins — and they weigh just over three-quarters of a troy ounce.
Since they don’t qualify as bullion, there are also certain strikes of the coins that hold more than intrinsic value. If you come across any of the following specimens, you might have something really special in your possession:
- 1996-D Centennial Olympics – Rowing
- 1996-D Smithsonian 150th Anniversary
- 1996-D Centennial Olympics – Tennis
- 1997-P National Law Enforcement Memorial
- 1998-S Black Revolutionary War Patriots
- 2001-D American Buffalo
These qualify as especially rare silver coins among other dates. Of course, their value remains much lower than certain rarities. If you’re unsure of the value of your coin, check out the pricing guide from the Professional Coin Grading Service.
While common examples of these commemorative releases are worth less than bullion coins, you never know when you might find a scarce specimen.
Benefits of Bullion Silver Coins
You’re investing in silver: When you buy rare silver coins, it’s not really the precious metal you’re investing in. With bullion, your item’s value will not fluctuate due to collector demand. It’s all about the silver.
High liquidity: Bullion coins are in much higher demand than rarities. In fact, the U.S. Mint recently couldn’t keep up with demand. It’s a simple fact that there will always be more investors than collectors.
You can’t get surprised: Imagine you own a rare silver coin that has only three other known examples in the world. Then one day, someone discovers a box containing 10 rolls of the coin. The rarity of your investment — and thus its value — will immediately drop. This isn’t the case with bullion.
Benefits of Rare Silver Coins
More valuable than bullion: Rare coins hold value because of their scarcity. For instance, a 1794 Flowing Hair silver dollar once sold for over $10 million even though it only contains a few grams of silver.
Value survives fluctuations: No matter what precious metal you invest in, there will be fluctuations in price. When the value of a coin rests on its collectability, though, sharp declines in silver value mean nothing.
Easier to store: Would it be more difficult to store a single rare silver coin worth $20,000 or 20 rolls of bullion coins? Once you own a sizeable amount of bullion, storage can become an issue. The value of rare coins is far more condensed.
Buy Modern or Rare Silver Coins Today!
In many comparative scenarios, there’s a definite answer to “which is better?”. Unfortunately for those trying to decide between rare and modern silver coins, this isn’t really the case. The right answer for you will depend heavily on your investment strategies and goals.
There is one truth that holds firm, though, and that’s the fact that silver is a smart investment. While it may experience more price fluctuations than other precious metals, it has still served as a store of value throughout history. And no matter where you go in the world, it will hold that value.
At Silver Gold Bull, we strive to offer products to meet every investment goal. Whether you decide to buy bullion or rare silver coins, you’ll find what you need here. Check out our Silver Coins product page today to see our vast selection.